Big ideas for a small island
I’ve just returned from the second annual Global Reinsurance Innovation and Insurtech conference at Tuckers Point, Bermuda at which AdvantageGo were proud to be a lead sponsor once again. Unlike many other conferences, this one really makes the effort to be a little different and delivers a great mix of content, speakers, panels, a Dragons Den (more of that later), and some great food!
Bermuda has always been the global centre for reinsurance and in recent years it has taken up the Insurtech mantle doing its best to entice Insurtech start-ups onto the island. This summer, Bermuda set up an innovation hub and ‘sandbox’ to enable Insurtech innovation and experimentation and to help these fledgling companies flourish.
The island’s government, regulators and development agency are all backing this theme and Bermuda passed new regulations in June to support companies in testing solutions before they invest in operational deployment. The conference session on regulation explored this theme further and expanded on Bermuda’s commitment to innovation, endorsed earlier by the Premier, The Hon. E. David Burt in his welcoming comments.
First up on stage was keynote speaker Rob High, VP and CTO of IBM Watson presenting on ‘The world revolution of Artificial Intelligence’ and what an opener! Rob gave us some truly remarkable facts in a very engaging talk, for example until the year 1900 human knowledge doubled approximately every century. By the end of World War II knowledge was doubling every 25 years. IBM estimate that by 2020 world knowledge will double every 12 hours! 80% of that data will be qualitative, i.e. social media and non-numeric data, only 20% is quantitative i.e. measurable facts and numbers. The only way to make sense of this vast amount of data will be Artificial Intelligence (AI) that has the ability to amplify our cognition.
Mastery of data will be one of the prime drivers for success in our industry in the coming years and we should be on that road now. It’s an area that we at AdvantageGo have been investing in with the recent release of our digital assistant, ‘Aniita’, which has the ability to interrogate insurance data from multiple sources and provide text and voice conversational feedback to users.
I was fortunate enough to join Stephan Ruoff, CEO Tokio Millennium Re and Laura Taylor, Managing Partner and CFO of Nephila Capital on a panel to discuss the ‘Changing Reinsurance world 2017/2018 & 2019’ which, in my opinion, was one of the most interesting discussions, but I guess I would say that. One of the many things that came out of our discussion was the observation that Insurtech drives are increasingly incremental, favouring marginal gains via short-term fixes rather than major transformational projects, which reflects what we are seeing with less large policy administration replacement deals and more componentised deals that build into and around the existing application landscape. We all agreed AI should be high on our collective agendas but also that we haven’t seen it put to use in any meaningful way yet.
Another interesting discussion was the Cyber Insurance panel in which Panelist Giles Harlow from Aon highlighted two major changes he’d seen in the last year or so; firstly, the massive uptick in Cyber limits being purchased and secondly, the type of buyer that is now requiring policies. This market has been rapidly changing since the ‘NotPetya’ and ‘Wannacry’ losses and the hidden silent Cyber risk is becoming better understood. It was also noted that the ‘silent cyber’ risk was much larger than the market believes. Silent cyber is the potential cyber-related losses due to silent coverage from insurance policies not speciﬁcally designed to cover cyber risk. For example, an attack on an industrial plant’s control system causing a boiler explosion that leads to massive property damage from a ﬁre and the resultant claim against the property insurance. “Does the panel monitor the dark web?” was one intriguing question from the audience, the answer interestingly was ‘yes’ but none of the panellists went on to divulge how.
The Insurtech Startups Live! session was one of the most entertaining and indeed beneficial panels. There are some truly dynamic and brilliantly innovative start-up companies out there, but sometimes they lack the depth of industry knowledge necessary to capitalise on their ideas which is where the carriers and established vendors should step in.
This year, seven start-ups took five minutes to pitch their business to a small panel of judges, who in turn asked some questions in a format very like BBC’s Dragon’s Den. The audience voted for their favourite start-up using a phone app. An interesting group this year but three were head and shoulders above the others: Dreyev who have a driver alertness system that detects tiredness and distraction in drivers and warns them with the aim of preventing accidents, and RozieAI who offer their clients a customer care AI platform to build an intelligent digital engagement programme. But the winner this year was Stable Insurance, awarded for their rapid onboarding insurance offering for the ride share sector like Uber and Rideshare.
Bermuda remains the global hub for reinsurance and consistently shows itself to be committed to innovation and progressive thinking. Combine that with the circa $90Bn insurance and reinsurance premium written on the island last year, the glorious beaches, the temperate climate and the smiling, happy Bermudians who wouldn’t want to do business here?